You might think that once you’ve secured an equity release product, you are locked in for your lifetime. However, you’d be wrong. In fact, if your plan is even just a few years old, you may be able to switch to a newer one, one with improved features. And you could end up with an even better deal than your first product.
Switching plans can actually save you a significant amount of money, primarily because you could switch to a plan that has a much more favorable interest rate. In essence, you could be just securing a better deal by switching.
The reason switching plans is even a consideration for some homeowners is because there are constantly new plans being introduced. There are new features created all the time and if you’ve had your existing plan for a few years, many of the features that are available now weren’t in existence when you first secured your loan. So, if you took out your plan several years ago, you are likely able to switch to one now that is just a better overall deal.
That new deal could make better financial sense and it could mean that you are better able to leave behind an inheritance to your loved ones. You can use our switch plans calculator to see if there is a better deal available to you given your circumstances. With this calculator, you’ll be able to see if there are better interest rates now available to you.
Overall, the primary reason to switch plans is to save you money. There are simply new and improved products being introduced all the time and if you have had your product for several years, many of the features that are most popular now were not even in existence when you secured your loan.
If you want to release more money from your existing plan, it might be the prime time to investigate if there is an alternative plan available to you. You could get a better deal on the new equity you hope to release. We can help guide you in this process, which can be a bit tricky but can really pay off in the long run.
Finally, if you are moving from one property to another, it is a good time to look into alternative plans. Perhaps your existing plan is no longer the right fit for your new home. Again, we can help review whether or not a new product makes sense for you if you are moving from one property to another.
The first step to switching is using our easy calculator. Simply input the details and the calculator does all the work in comparing your original plan with those now available. Results are easy to understand and will show you a comparison between your old plan and a potential new one. It will show you how much money you could save by switching plans.
While it is easy to see if switching makes sense for you, you should still keep a few things in mind:
• Interest: You will still accrue interest on your current loan while applying for a new one.
• Early repayment charges: Many of the older plans were not built to be repaid early which means you might incur significant early repayment charges. You’ll need to consider if switching is still a good idea if your plan does impose these charges.
• Costs: There are potential costs associated with setting up a new plan. These vary by lender and product but you should take these into account if you are considering switching.
We can evaluate each of these considerations with you when you reach out to one of our trusted advisers.